Canada’s Industrial Lottery: Why Picking Winners Could Lose Us the Economic Game
Nearly $1 billion in potential investment is heading to a U.S. port instead of Canada, thanks to a regulatory environment that increasingly feels like a high-stakes gamble. Nutrien’s decision to build a potash export terminal in Washington State isn’t an isolated incident; it’s a stark warning that Canada’s current approach to industrial investment – prioritizing a select few “winners” through the Major Projects Office – is actively driving capital and opportunity elsewhere.
The Illusion of Expediency
The Major Projects Office (MPO), championed as a one-stop shop to accelerate projects of national interest, initially appears a sensible solution to Canada’s notorious regulatory bottlenecks. The promise of a streamlined, two-year approval process is alluring, particularly as Ottawa aims to double non-U.S. exports this decade. However, this focus creates a dangerous dichotomy. While the 13 projects currently benefiting from the MPO’s expedited review process enjoy a significant advantage, the vast majority of potential investments are left navigating the same labyrinthine bureaucracy – a bureaucracy that, arguably, has become more congested as resources are diverted to the favoured few.
Nutrien’s Vote of Non-Confidence
Nutrien’s decision speaks volumes. CEO Ken Seitz explicitly cited regulatory hurdles, taxes, and approval timelines as key factors influencing their location choice. This isn’t about a lack of desire to invest in Canada; it’s a pragmatic response to a business environment perceived as less competitive. The fact that Ottawa is now scrambling to “find out what Canada could have done to make that better” – with the temptation to simply add Nutrien to the MPO’s list – highlights a fundamental misunderstanding of the problem. Treating investment attraction as a lottery ignores the systemic issues stifling broad-based economic growth.
Beyond the “Lucky 13”: The Need for Systemic Reform
The solution isn’t to expand the pool of “winners,” but to level the playing field for all investors. The two-year approval timeframe currently reserved for MPO projects should become the standard across the board. This requires a multi-pronged approach:
- Eliminating Duplication: Streamlining processes by ending overlap between federal and provincial regulations is crucial. Concurrent, rather than sequential, reviews are essential.
- Prioritizing Economic Expansion: A fundamental shift in mindset is needed – one that views economic growth as the primary objective, rather than an afterthought. The Red Tape Reduction Office, while a positive step, needs significantly more resources and authority.
- Labour Peace: As Heather Exner-Pivot of the Macdonald-Laurier Institute points out, leveraging existing tools like binding arbitration under the Canada Labour Code can mitigate disruptions at ports – a major deterrent to investment.
Taxation and the Technocratic Trap
Regulatory reform must be coupled with a re-evaluation of Canada’s corporate tax structure. The current tendency towards “boutique tax carve-outs” – targeted incentives for specific sectors – is a misguided approach. Broad-based tax cuts, benefiting all businesses, would be far more effective in fostering a competitive investment climate. This reflects a broader issue: a “technocratic mindset” within government that assumes Ottawa knows best where to allocate capital, rather than trusting the judgment of private sector decision-makers.
The Promise of Interprovincial Agreements
Recent draft agreements between Ottawa, Manitoba, and Ontario offer a glimpse of progress. These unglamorous, yet critical, reforms demonstrate the potential of collaborative efforts to reduce intergovernmental friction. However, these are just initial steps. Sustained commitment and a willingness to challenge the status quo are essential.
The Future of Canadian Investment: A Choice to Make
Canada stands at a crossroads. Continuing down the path of selective investment – picking winners and hoping for the best – will inevitably lead to further capital flight and diminished economic prospects. A truly competitive Canada requires a predictable, efficient, and broadly applicable regulatory framework, coupled with a tax system that incentivizes investment across all sectors. The MPO isn’t the answer; systemic reform is. The question is whether Ottawa has the political will to embrace it.
What steps do you think are most critical to improving Canada’s investment climate? Share your thoughts in the comments below!
